[quote=HLS]….
Lying about income and allowing 100% financing had NOTHING to do with the housing bubble, it was not getting loan disclosures early enough that was the problem……[/quote]

You know, HLS, that doing something like requiring a minimum down payment of 20% on owner occupied homes, and 30% otherwise, is not being considered as a fix for our financial problems precisely because it would… fix them.

Everything is being done to keep home prices high. Measures to clamp down on foolish lending are implemented only if they leave enough wiggle room for home prices to stay high. So proposals like tinkering with disclosures for consumer protection are now very popular, because everyone knows they will be ineffective. Changing loan applications will have zero impact. The fact that during the bubble everyone was lying on loan applications, and no one was checking, and no one was even reading the loan agreements they were signing, is now conveniently ignored.

We need to get rid of down payments of less than some reasonable number, like 20%, for once and for all. Otherwise the madness and economic damage will continue for many more years, and we’re just wasting our time and letting ourselves be distracted by reforms that don’t actually get the necessary result.